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Japan: Tokyo’s business tax rate proposals, effective 1 October 2019

Japan: Tokyo’s business tax rate proposals

The Tokyo metropolitan government on 28 May 2019 released proposals for changes to the tax rates for Tokyo businesses.


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The proposed business tax rates are expected to be considered in the second ordinary session (from 4 June to 19 June 2019) of the Tokyo metropolitan assembly.

Under Japan's 2019 tax reform, effective 1 October 2019, a part of the business tax is separated out from the total business tax, and a new national tax (the "special business tax") is being provided as a permanent measure to address gaps in local tax revenue, as collected by local governments, with the effect that the special business tax revenue is shared by the Japanese national government with local governments. As a result, the business tax rates applicable for fiscal years beginning on or after 1 October 2019 are being amended.

In general, reduced tax rates for businesses in Tokyo are being proposed. However, because the amendment to the tax rates is to improve gaps in local tax revenue collection of local governments, the changes would have little impact on the overall effective corporate tax rates.

Read a May 2019 report prepared by the KPMG member firm in Japan that sets out in table format the business tax rates being proposed by Tokyo’s government

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